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A good part of SLA functionality is deriving correct account based on business rules. This functionality is called defining account derivation rules. The outcome of accounting derivation rule sometimes is an entire account (famously known as code combination) or simply a segment in the code combination. If only a segment is derived then each of the segment in the chart of accounts is weaved together just like the way it is done in workflow account generator. Take for example revenue account. Oracle gives us a default account from the transaction in AR which is generated using Auto Accounting. What we can do is, take that account and plant a specific segment, say, natural account under specific condition. Also the whole account can be replaced with a new one under specific conditions.
The difference between workflow account generator and SLA accounting derivation rules is that, the conditions under which the account or a segment derived reside in code in first one but are visible to the business users in later one. They understand the conditions under which an account is derived because it is configured in the screens and not sitting some cryptic code. Also little room for bugs, so to speak.
Usually we generate the account for either credit or debit line of a journal entry. An accounting entry, at a minimum, has a debit and credit. These are called are journal lines (a debit line and a credit line). An accounting derivation rule is for a specific journal line. Going a little further this journal entry is for a transaction. This transaction event is called event class. These two make up the heart of SLA setups.
Taking the same example of revenue account, revenue account is a journal line. Revenue is one side or one line in an accounting entry. The other usually is a receivables account (in case of AR transaction). These two together make a journal entry. And this journal entry belongs to an event class called Invoice (in case it is invoice).But if you have observed the line definitions under invoice event class you might have noticed way more than these two lines. That is because each of them is used in different ways depending on the nature of transaction.
Implementation: What is in it? What kind of work is involved?
Traditionally we have accounting in each application or a process flow is taken care of by individual specialist in that area. For example an AR specialist used to get the accounting needs implemented as per the requirement and cost management or order management specialist gets the cost accounting right. So a business process owner for accounting has to run around each of these specialists to get the accounting taken care of. Also prior to SLA the functionality provided in Oracle is rigid in some application areas and very flexible in a number of other areas. To cater to these flexible needs a number of tools were also available like Workflow account generators, Post or Pre hooks or some setups to generate accounting based on business rules.
SLA is a game changer from that perspective. We can throw away workflow accounting generator and post or pre-hooks coding. And also one specialist, who understands enterprise accounting and business needs of accounting department, can implement complete SLA solution in all applications and processes. This is new and emerging consulting role.
Implementing SLA involves writing rules to arrive at accurate accounting under specific conditions for a specific transaction event. To achieve what you need, we may need to write some coding in custom sources but in general that is far simpler than workflow. All you need to know if writing simple pl/sql code.
But for a SLA specialist the challenge is in understanding transactions and event class is mapping to these transactions. Sometimes it is self explanatory. An event class like Sales Order issue in Cost Management or Invoice in AR tells you that these are for COGS and Revenue respectively. But not all are so straight forward. But if you have knowledge about the transactions performed in each application areas and some technical background it is pretty easy to get there.
Apart from generating accounts there are a lot of other features in SLA.